Huawei Records 60% Loss In Nigeria; Retrenches Staff And Government Gets Angry. Nigeria Must Ban Recession

Huawei Records 60% Loss In Nigeria; Retrenches Staff And Government Gets Angry. Nigeria Must Ban Recession

The Nigerian Parliament is not happy and has summoned the Chief Executive Officer of Huawei, which manages equipment for some leading telecommunications operators in Nigeria, over mass sack of Nigerians working in the firm. Sure, it is unfortunate that many Nigerians lost their jobs. We hope Huawei provides the needed support to assist them.

However, what Nigerian government is doing is not really fair. The Parliament had demanded a comprehensive documents showing its nominal roll list of expatriates working with the firm in Nigeria, as well as the Nigerian staff working with them. Huawei has 339 expatriates working in Nigeria, according to Mr. Osita Nwneze, a company representative.

The members of the National Assembly, Nigerian parliament, are angry for two things:

  • Job losses in the telecommunication sector
  • Drop in revenue accrued to the federal government in the last one year.

The Legislature wants to ensure that compliance to labour laws are followed. Excellent point. But the second part is not that clear.

The Real Problem

Huawei is not having the best time in Nigeria. With the weakness of Naira, the company might have lost a lot of money in its Naira denominated contracts. Everyone knows that Nigeria is on recession and during recession, investments usually drop.

According to the company, it recorded 60% loss between 2015 and 2016, which also affected the revenue returns to the federal government of Nigeria. That means, it was not making as much money as it was making in the past. Osita, the company representative summarized it thus:

“The issue of job loss can be broken down to the problem with forex, this has affected our business as we can only have business when operators buy from us. Between 2015 and 2016, the company recorded about 60 per cent loss”.

The only solution to this is for the National Assembly to ban recession so that companies will continue to make money and send to government what is due to it. You do not expect companies making losses in recession to be sending money to government. Also, you do not expect them not to re-balance their staff capacities with diminishing business activities.

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